In this report, we comment on the matters arising from the 2015–16 financial report audits of the 87 public hospitals in the public hospital sector. We also assess the sector's financial performance during 2015–16 and its sustainability risks as at 30 June 2016.

We comment on key matters that arose during our audits and analyse the information in public hospitals' financial reports. This is one of a set of Parliamentary reports on the results of our 2015–16 financial audits.

Ordered to be published

VICTORIAN GOVERNMENT PRINTER November 2016

PP No 223, Session 2014–16 

Accountability

Responsibility of public entities to achieve their objectives in reliability of financial reporting, effectiveness and efficiency of operations, compliance with applicable laws, and reporting to interested parties.

Adverse opinion

An audit opinion expressed if the auditor has sufficient appropriate audit evidence and concludes that misstatements, individually and in aggregate, are both material and pervasive in the financial report.

Figure D1 shows the financial sustainability indicators for self-funded entities. These indicators should be considered collectively, and are more useful when assessed over time as part of a trend analysis.

Figure D1

Financial sustainability risk indicators

Figure C1 shows the risk ratings applied to the points we raise in management letters during an audit.

Figure C1

Risk definitions applied to issues reported in audit management letters

Figure B1 shows the list of portfolio departments and associated entities named in this report and illustrates the outcome of their audit opinions.

Figure B1

Audit opinions issued by portfolio department

We have consulted with named portfolio departments and agencies, and we considered their views when reaching our audit conclusions. As required by section 16(3) of the Audit Act 1994, we gave relevant extracts of this report to those agencies and asked for their submissions or comments.

Responsibility for the accuracy, fairness and balance of those comments rests solely with the agency head.

Full responses from the Department of Treasury & Finance and the Department of Education & Training are included in this Appendix.

Machinery-of-government (MOG) changes amend the administrative structure of government agencies. They can be small changes—such as the transfer of a function from one entity to another—or significant changes—such as the creation or discontinuation of a portfolio department.

In last year's Portfolio Departments and Associated Entities: 2014–15 Audit Snapshot report to Parliament, we highlighted that the Department of Education & Training's (DET) financial reporting processes were poor.

We qualified the 2013–14 and 2014–15 financial statements of DET and its predecessor: